The time has come: The personalization revolution is nearly here

Marketers from large companies that I speak with regularly think that the time has finally come to realize the dream of personalizing every element of their interaction with a customer. They truly believe they should be able to customize each communication with each user in real time based on the history of their brand's interaction with that person.

For many of these marketers, e-mail campaigns come closest to making this dream real. For instance, their campaigns are largely triggered by user behavior or other data; e-mail content is targeted based on purchase and link history; and each communication is personalized from the subject line, to the offer, to the landing page, and beyond. The most advanced digital marketing partners are also appending demographic data to make their clients' e-mails more meaningful, even for the newest subscribers on a list. There is little doubt that e-mail is leading the move to greater personalization and dynamic targeting.

But marketers are demanding even more: they think the entire customer purchasing experience should be more like e-mail, with content assembled dynamically to match the users' needs and the marketer's goals. Before this becomes a reality, though, I can see five challenges that marketers must overcome - some obvious, and some less so.

Data integration. This is top priority for many marketers right now. Companies must work out how to assemble data from external and internal sources to build that elusive single view of the customer.

Cross channel integration. Today, technology makes every type of marketing dynamically targetable, but the numerous systems and solutions that make targeting possible generally don't talk to one another. So the behavioral data, which I used to target the banner you just saw does not travel with you as you enter my Web site; nor does your recent click behavior accompany you into my email database after your purchase.

Optimization. With so much content and so many users, and each visit lasting only a few clicks, how do you decide what to show next on your Web site? Once you pluck the low hanging fruit, like 'abandoned shopping cart' and 'last product viewed', how do you make systematic progress at a rapid pace without spending a fortune on creative development?

Content Management. Elaborate, powerful content management systems are often limited in practice to serving content on a Web site, and even then they can be too hard to change to meet marketing's timetables. Content needs to be organized and accessible to all channels.

User Anonymity. Success stories often focus on the customers about whom marketers know the most - frequent visitors, past purchasers - but for most companies, 80 percent of opportunities to interact with prospects occur with people for whom there exists no record of past behavior, or almost none.

Despite these five challenges, the general opinion in marketing-land is that the advent of integrated, personalized, optimized marketing is near. One of the reasons is that real technological progress is being made by a generation of exciting young companies.

For instance, behavioral targeting companies like Tacoda are offering ways to more effectively target the anonymous web user. Optimization specialists like Optimost help marketers make content more productive, while personalization specialists like Touch Clarity, acquired last week by Omniture, can apply a similar logic to the individual user experience. Venture-backed companies like Aggregate Knowledge are tackling the problems of leveraging collective behavior to select the best content to offer each user. And those are just a few examples.

Equally important, we are seeing the emergence of large, cross-channel, integrated marketing organizations that are well placed to make use of these new technologies. Our firm is part of this trend, bringing together under one brand a broad set of related marketing technologies and expertise, and combining them to introduce innovative, integrated new solutions.

Publicis' recent acquisition of Digitas demonstrates that it's not just technology players like us, but also traditional agency holding companies that are moving towards offering integrated execution. And the recent investment by General Atlantic in AKQA, at a very dramatic price, shows that smart money is prepared to back the trend.

So buckle your seat belts - integrated personalized marketing is around the corner. Here are four things to keep in mind as you plot your course:

Targeting isn't just for your best customers. It's easier to reach them if you've got more data. But, consider devoting just as many resources to improving yields from the larger mass of relatively unknown prospects, because that's where you'll ultimately find the biggest gains.

Leverage the content you have. Too many great ideas never get off the ground for lack of time or money for creative. Before you let that happen to your project, make sure you are fully leveraging the promotions, offers, and content you're already paying to develop.

Don't be deterred by limited information. There is usually data available to be leveraged, even on a user's first click, and recognition technology can help hone in on the user's identity faster than you might imagine.

Focus your efforts on users as well as content. Don't just worry about what product to show next, what elements to keep or add to the page. The really critical question is 'what does the user want?' What question is in their mind? Make the data answer that question.

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